Introduction

In late 2007, the first discussions were held on a new framework to replace the Kyoto Protocol, which set mandatory greenhouse-gas emissions targets for developed countries and expires in 2012. The talks in Bali, Indonesia, signaled that some developed countries in the Group of 8 (G8)—such as Canada and Japan—have begun rethinking Kyoto’s position of allowing developing countries, some of the largest emitters in the world, to remain outside the mandatory reduction requirements. Japan and Canada are among a number of Kyoto signatories struggling to meet their emissions targets.

The United States is the only G8 country that has refused to ratify Kyoto. In 2001, President Bush rejected the treaty on the grounds that it would harm the U.S. economy and did not include developing countries. Entering the last year of his administration, Bush had not softened his opposition to mandatory caps much, but that stance was growing increasingly tenuous. Meanwhile, emerging industrial powerhouses China and India continued to oppose any mandatory emissions reduction schemes for developing nations.

What has happened since the Kyoto Protocol was signed?

The accord went into force in 2005 after Russia’s ratification helped it meet the threshold of membership accounting for 55 percent of global emissions. So far, more than 174 countries have ratified the treaty, with most of the responsibility for reducing emissions falling on thirty-five nations including European countries, Canada, and Japan. As of 2002, the twenty-seven-member European Union ranked the second-largest emitter (BBC) of greenhouse gases, after the United States. Estimates in late 2007 suggested China may overtake the United States as the top emitter.

Some Kyoto participants have found it difficult to meet their assigned targets—ranging from 5 percent to 8 percent below 1990 levels (except EU countries, which have special targets). Collectively, the European Union agreed to a target of 8 percent below 1990 levels. The protocol allowed the European Union to assign individual countries their own targets, which go as high as 28 percent below 1990 levels. A June 2007 report from the EU’s environmental agency suggests that with reductions of nearly 7.9 percent as of 2005, it is on track to meet its Kyoto goal. The EU report shows that a few countries, such as Britain and Sweden, are expected to meet or exceed their individual targets, but other countries, such as Spain, could be headed in the wrong direction.

Some critics say mismanagement of the European emissions-trading program launched in 2005 resulted in many industries not having to reduce emissions (PDF) very much. Under the program, industries are allocated emissions caps and then allowed to purchase credits that offset their carbon output above those caps. Greenhouse-gas trading prices were higher than expected when the market first opened but then devalued significantly once it was discovered that the European Union had handed out too many credits, creating a market surplus—thus allowing industries to make little or no emissions reductions (Energy Business Review). The Economist notes that “carbon reduction makes sense until the marginal cost of cutting carbon emissions is equal to the marginal benefit of cutting emissions.” This Backgrounder explains cap-and-trade programs.

How have G8 members done under the protocol so far?

The EU’s environment agency projects Britain and France will meet their Kyoto obligations but other G8 members are struggling:

Canada. Emissions have gone up as much as 35 percent since 1990 because of continued increases in the exploitation of the country’s oil resources, calling into question whether Canada can make its 5 percent reduction target.

Japan. The second-largest economy in the world is also in jeopardy of not making its assigned goal. Japan’s emissions have risen over 8 percent, which means the country will now have to reduce emissions more than 14 percent by 2012 to meet its Kyoto target of 6 percent.

Germany. The world’s sixth-biggest carbon dioxide emitter faces criticism from environmental advocates and the European Union for plans to build twenty-six new coal-fired power plants (Spiegel), considered one of the main sources of greenhouse-gas pollution. A German plan to exempt coal plants from Kyoto requirements adds to concerns. Although Germany has managed a 17 percent reduction in emissions (very close to its overall goal of 21 percent under the protocol), much of those reductions came from shutting down power plants in former East Germany.

Russia. Russia did not face mandatory cuts since its greenhouse-gas emissions fell well below the 1990 baseline due to a drop in economic output after the breakup of the Soviet Union. Yet Russia has approved joining the emissions-trading market. As the largest corporate emitter of greenhouse gases in the world, Russia’s electricity company stands to realize large profits from selling carbon credits to other industrialized countries. Russia’s official RIA Novosti news agency said in January 2008 the country was unlikely to exceed the 1990 levels in even the expected post-Kyoto commitment period.

What has the Bush administration done since it rejected Kyoto?

The United States would have been required to reduce its emissions 7 percent below 1990 levels had it accepted ratification of Kyoto. Instead, U.S. emissions rose more than 16 percent (PDF) between 1990 and 2005.

The Bush administration and Republican lawmakers opposed to emissions caps have been touting the Asia-Pacific Partnership on Clean Development and Climate, which consists of Australia, China, India, Japan, South Korea, and the United States. The aim of the initiative, which began in 2005, is to foster cooperation on ways to improve clean energy development and lower emissions without global mandates. But since the initiative started, the United States, India, and China have come under increased domestic pressure to move toward mandatory emissions controls. California is among several U.S.states that have entered into partnerships or passed laws for controlling greenhouse gases ahead of the federal government, leading to a showdown with congressional lawmakers. Major U.S. cities have also instituted a host of policies designed to cut greenhouse gases (WashPost).

In September 2007, the Bush administration held a two-day meeting in Washington closed to the press with the world’s fifteen-largest greenhouse gas emitters, which included all G8 countries except for Japan. At the meeting, the president argued for each nation to devise its own strategies and long-term goals for voluntarily fighting climate change.

What are the views of G8 members on how to deal with climate change?

Dealing with climate change falls into two major camps, mandatory emissions controls and voluntary programs. There is a consensus among the group’s seven Kyoto signatories that, despite initial difficulties, the first round of the protocol represents an important step toward tackling global warming. Europe backs tougher mandatory emissions measures for the next round of climate commitments. Discussions also are under way in Canada to move toward taxing greenhouse-gas pollution. European Union officials in early 2008 opposed a green tax for importers (FT) to create parity for local manufacturers with Kyoto requirements. However, requiring importers to buy credits in the trading scheme is under consideration.

The Bush administration has been adamant in its rejection of mandatory caps. Some government employees contend the administration has tried to silence or obscure public information (CBS) on global warming. But the United States has turned into a battleground over how to handle climate change. Several states, especially California, are fighting the auto industry and the U.S. Environmental Protection Agency in court over whether states have the right to impose restrictions on cars, which could result in a de facto nationwide standard on auto emissions. The U.S. Supreme Court already has said the Environmental Protection Agency has the authority to regulate greenhouse gases from automobiles, overruling the Bush administration’s position that the agency did not.

During the 2007 Bali conference, the United States, along with countries such as Canada and Japan, blocked an EU proposal for mandatory emissions cuts of 25 percent to 40 percent below 1990 levels by 2020—jeopardizing negotiations. U.S. negotiators argued that putting such an ambition in writing so early in the new framework’s process would “presuppose the outcome,” since the Bali conference is to be the first of several meetings. European countries, including Germany, threatened to boycott a future U.S. major emitter conference unless the United States backed down.

The conference concluded with the inclusion of hoped for mandatory cuts added as a footnote. There are some indications Canada and Russia may be unwilling to commit (Guardian) to these targets; one week after Bali, Japan reversed its stance and said it would accept the new targets. CFR Fellow Michael A. Levi said in a December 2007 interview that just because some Bali negotiators were unwilling to make specific commitments, that did not necessarily indicate they oppose coming to an agreement in the future.

What is the G8 perspective on the carbon emissions of developing countries?

The United States maintains that action on global warming will not work without the participation of all big emitters. Other G8 members seem to support that view. Canada joined the United States in Bali in calling for developing nations to take on binding responsibilities for reducing greenhouse gases. China and India, while beginning to consider what to do about their own growing emissions, have maintained that developed nations are responsible for the current level of greenhouse gases and should take the lead (Yale Global).

What did 2007 talks on climate change accomplish?

The June 2007 G8 summit ended with a pledge from the United States to “seriously consider” significant cuts by 2050 to man-made greenhouse-gas emissions (NYT), which have been linked with global climate change. That raised questions about talks for replacing Kyoto Protocol commitments. Opinions differ on the outcome of the G8 talks. Sally McNamara, a senior policy analyst in European affairs at the Heritage Foundation, said the 2007 G8 language on global warming mirrored language that came out of the 2005 G8 summit, which contained no real targets for reducing emissions (PDF).

Other talks in 2007 ended in much the same mixed fashion as the G8 summit. The September major emitter conference in Washington yielded no firm agreements, nor did it seem to inform or aid progress in Bali. Rather than being a leader, the general consensus in Bali was that the United States was a hindrance on steps forward. UN Bali negotiators were reported to be frustrated by a lack of progress on the next protocol. Overall, Bali negotiators agreed to two years of negotiations to be concluded in 2009—though without firm commitments of goals for new greenhouse-gas reductions. The meeting also made headway on including deforestation projects for use as greenhouse-gas offsets and easing the transfer of green technologies to developing nations. However, many specific details still need to be hammered out.

Without the United States and developing countries entering into binding commitments, other Kyoto signatories may be unwilling to agree to additional international commitments, says Elliot Diringer, director of international strategies for the Pew Center on Global Climate Change. The European Union is likely forge ahead on its own to reduce its greenhouse gas emissions 20 percent by 2020. But after Bali, UN environment agency chief Achim Steiner said: “The bottom line is: there is no alternative to trying to find an agreement in which the [United States]… takes significant action” (Reuters).